Most people never get involved in real estate investing because the assumption is that you need a large bank account to do so. In this article I am going to explain how you can buy 4 houses in one year without using your own capital. Starting an LLC to protect your personal assets should be the number one priority. This will end up costing you a few hundred dollars depending on where you live.

Step 1: Finding a deal

In order to get investors interested in lending you money you will need to find a good deal. I will try to cover a few ways to find deals in this article. The first way is your traditional method of getting an agent and having them send you properties. This method may work in some areas but typically good deals are not listed on the MLS. We use people we call wholesalers.They find foreclosures, auction homes, tax liens and off market deals. They get those properties under contract and flip the contract to an investor for a fee. Another method is making low ball offers on a listed properties in hopes someone really needs to get out of their house. We need to be sure there is going to be room to build at least 20% equity so we can refinance properly and pull out all of our money. We like to buy properties that need cosmetic work that can quickly add some value. We suggest getting a licensed contractor to give you an estimate of renovations before making an offer.

Step 2: Finding the Funds

Finding someone to fund a bad deal is next to impossible, but if you find a good deal and have good credit, you can easily find funding. Hard money lending companies will often times lend you 100% of the money you need to buy and renovate the property. Usually hard money loans come with a high interest rate around 10-15%. Depending on how long it will take to renovate, a slightly higher interest rate is not a big deal. As long as you have 20% equity in the home after the renovation you can refinance, pulling all of your money invested back out in the form of a long term fixed rate loan.

Step 3: Find a Qualified Tenant

Finding a tenant is easy, finding a good tenant is a little more difficult. We use a program called “Smartmove” for screening potential tenants. This program screens for credit history, eviction history, job history, and current income. This saves a lot of time and headache trying to find out all of that information from different sources.

Step 4: Refinance

This, in our opinion, is the most difficult part of the whole process. If have been following our strategy, by this point you would have bought, renovated, and rented this property. If all of your analysis is correct, you should have at least 20% equity in this home. The next step is to find a lender that will give you a long term fixed rate loan, at a decent rate and 80% LTV. (loan to value). If executed correctly, you should be able to fully pay back the original hard money loan and start the process over again. This whole process should take no more than 3 months. You CAN buy 4 rental houses in 1 year!

-Ryan Greenberg